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back to article What on earth do you think you are doing, Darling?

Well, wasn't that a wonderful little budget? We're broke, borrowing the entire output of many a small nation, and this as a result of the policies from the man who promised to abolish boom and bust. But it's not all bad news. Some of it is worse. Take, as a minor example, the increase in statutory redundancy pay announced. Some …

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IT Angle

This really ISN'T the place for this discussion.

I don't come to El Reg to read economic commentary - if I wanted that, there are loads of daily newspaper sites for that.

I come here to read irreverent IT stuff and articles about Bulgarian air bags.

So....what is the IT Angle?

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Excellent Article

Worstall for Chancellor!

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(Written by Reg staff)

Re: This really ISN'T the place for this discussion.

The IT angle is another sad victim of the economic downturn, stupid.

I was going to take pity on you and reject your comment, but I feel like having a Flamey Friday.

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Surprising.

I normally have an instantaneous adverse reaction to anything that has even the hint of a political party's bias to it. But I actually thought this made for interesting reading.

And really, (putting the poor aside for one minute(or getting someone else to)) for the worker on an 'average' wage what's not to like about the having the first half of their wage untaxed?

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Happy

Its good for me!!

I worked out I will be about £325 a year BETTER OFF. I bet most of the people moaning about this budget haven't bothered to calculate how it really affects them, just jumped on the moaners' band-waggon...

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M
Flame

Interesting article

And I like your idea of an increased personal allowance roughly matching that of a year's minimum wage salary.

Also Ms. Bee, aren't all your days Flamey days?

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Adam Smith Institute?

I like the ASI even less every time I heard about them.

Normally.

But then someone talks about not taxing the poor heavily.

And I think "maybe they're not so bad..."

And then someone mentions UKIP.

And I like the ASI even less than the last time I heard about them.

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IT Angle

@Martin

Well Martin, the IT angle is that when the economy goes bust the first people to bite the bullet aren't the finance managers, nor the senior management teams - nope its the IT staff...

Really good article on something that affects everybody really.

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Unhappy

Sadly

This country is run by people who hae no expertise in their jobs. Just a bunch of chancers who verbally bored whoever would listen into submission.

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IT Angle

Re: This really ISN'T the place for this discussion.

You won't get the economic commentary in the mainstream papers because they think you're too stupid to understand it. El Reg quite often comments on stuff that you never see anywhere else, e.g. the Japanese paper comparing Global Warming ^h^h^h^h^h^h^h^h^h^h^h^h^h^h^h^h^h Climate Change to astrology and the stupid obscenity laws NuLabVatives brought in recently.

Keep it up, guys, you *are* the only credible opposition voice at the moment.

Which is not good, but at least someone is trying to hold these buffoons to account.

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Tax the poor...

If you vote, you should pay tax. Otherwise, non-taxpayers have no incentive to vote for tax-reducing parties (since it's someone else who'll be paying).

However, that doesn't mean that the mad tax system shouldn't be reformed. A flat rate tax would be a good start, so everyone can understand exactly how much tax they'll be paying, coupled with benefit reform to reward people who work.

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Pirate

@ the mods....

....why not remove the (much-hated) 'where's the IT angle?' symbol?

That would stop these oh-so-smart-ar$es from foisting their pearls of wisdom(?) upon us with alarming regularity via this symbol & associated (not so) witty comment

AyeFankYew.

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Anonymous Coward

Canine/human interface shock!

Hmmm Adam Smith Intitute and UKIP member doesn't like Labour policy... that's news!

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Re: This really ISN'T the place for this discussion

Times are tough - El Reg needs to broaden its reader base. Expect to see articles discussing the benefits of alternative therapies, complete with benchmarks (what would an IT site be without benchmarks?).

Seriously though, good read. I mean, I understand that the government needs money. But I dont think that, A) it spends money in the right places, and B) that the tax system is as good as it could be.

As for A), it might be an unpopular viewpoint but I think there are far too many people living on benefits. I can understand the point of benefits - to help those living in poverty - but I think it causes poverty rather than curing it. To cure poverty, you need to get people involved in the economic system, earning money, buying stuff, saving up. A tax cut for the poor and the abolition or reduction in benefits would, long term, help cure poverty. Help them to help themselves basically. Dont get me wrong - I have no problem with the sick or disabled needing benefits, thats fine. I'm not heartless. I just dont think that "workshy" (god I hate that word) should be given money for nothing. I dont think any other country in the world does, and it isnt working here. So many years on, we still have poverty and gang-related violence, and a lot of people have learned to game the system and stay on it. Its demotivated themselves to improve their lot in life, because now they dont have to.

The other thing is that, as the article points out, the low threshold for income tax really doesnt make any sense. And the 50p rate is potentially dangerous for the economy.

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Tim
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Well, duhh!

What are you saying? that we pay too much tax? that in order to ensure Fred the Shred gets his 700K a year for a job well done, we all suffer more than we should? And they give you a soap box for this blindingly obvious point of view?

Here are some facts

People who earn money will ALWAYS fund those that don't. People who earn very little money have FAR LESS spare money, so any taxes will always hit them hard. People who have "paid their dues" should get some kind of break over "lazy scoungers", and the RICH are usually so at the expense of everyone else. The governement take tax from almost everywhere, so the money i am taxed on earning, then gets taxed by me spending it as well.

Did the chancellor rectify the system to make it fairer?

NOOOOOOOOOOO!

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Thanks for this

From my quick perusal, most of the mainstream media are far more interested in the effect on the budget on the richest 2%.

Thanks for bursting the bubble!

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Stop

@AC 10:22

And how much use is that extra £300 gonna be when the economy which those pounds are based on bellies up?

Oh and yes, I've checked. As a student I will be worse off straight away, but mostly from non-essentials such as beer and petrol!

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Alert

taxes and chancellors

As a married man currently studying at Uni with a working wife, we were around £100 a week better off than being on the dole. Actually made getting up in the morning worthwhile.

Until last week when the Government decided to take £65 a week "tax credits" off us.

This means we are £35 a week better off than if we signed on as a couple.

What's more - if we "split up on paper" and signed on as two single people - we'd be £5 a week better off than we are now.

Where is the motivation?

What is the point?

The IT angle?

I used to work in IT but changed to studying law because IT jobs are thin on the ground and laughable in pay. 10 years intense experience with OSX, Linux and Windows is not enough experience - no - they want MS Drone qualifications or 10 years industry experience. All of which is business-speak for "you're the wrong colour and the wrong nationality" - businesses pretend they can't find anyone in the UK to employ so they can bring people in from overseas at lower cost or just outsource completely.

This country is a fucking toilet.

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@Martin

Looking for irreverance and airbags and yet you still managed to read the article and go to the effort of commenting. You want to be careful there, you might end up educating yourself.

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Black Helicopters

Re: This really ISN'T the place for this discussion

Well don't click on the link then, or read it or comment on it !

back to the article: In the end of the day the budget is all about spin and big headlines, people understand 'Tax Cut for the Poorest' and 'Increase in Tax Credits' better than 'Raising the Tax Allowance' which gives the party a boost in the poll.

Raising the tax allowance is clearly the best solution rather than recent solutions like tax credits and lower rate of tax which increase government costs through adding complexity.

IMHO tax credits is just a scam to get votes from the poor people they have thrown into the system who they will tell that the Tories will take it away from them at the next election.

Also can we have a badger icon for responding to stories about Darling

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@AC

OK, you run for Parliament then!

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bored of the misery and wallowing

Our turnover has tripled and profit doubled in the last 6 months. Colleague who writes iPhone apps doesn't have enough hours in the day to take on all the projects being thrown at him, he's looking to take on staff shortly.

Instead of wallowing in self pity, lets look at the positives, both Apple and Amazon have released good numbers this quarter, showing that you can make money in a recession.

Don't worry, be happy (I know that goes against our British nature)

Oh, and my local Michelin starred restaurant is always fully booked and I can't get a table.

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The UK is rubbish

This recession has blown away the smoke screen that the UK can support itself, for the past 10 years the banks have been making us money, they've been lending to businesses that have been employing staff.

none of these businesses have been making money, they claim to make an annual profit but thats false whilst the company is still in debt.

Why is the government so concerned about getting the banks lending? its because there isn't a single industry in the UK that makes money, its all a smoke screen, they borrow off the banks to make up their losses.

The UK is a sinking ship and labour's at the helm.

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ASI and tax

OK, I take the point that there's a legitimate IT angle via the risk in the recession to IT staff, but I'd have liked the author of the article to make that point rather than it appearing in comments.

Leaving that aside, the thing that makes me twitchy about this article is that it fails to acknowledge the ASI's general anti-tax bias. The ASI were one of the early advocates in the UK of the very daft (and extremely regressive) flat-tax system, and they continue to promote "Tax Freedom Day" (the day of the year when Britons finish "working for the Chancellor, rather than working for themselves"). So what appears to be quite a good idea in the article of increasing the lower earnings threshold seems in fact to be one part of a package to strip away income tax in general. Now if the article said raise the lower threshold and introduce higher rates above it, going up to much more than Darling's 50% for the very rich, that would be great. But I don't think that's the point.

If anyone has any doubts about where the ASI is coming from, the Wikipedia page on them (yes I know) lists some of the more charming 1980s policies that began with them and ended up as a great big mess - local government outsourcing, the poll tax, bus deregulation and the marketisation of the NHS.

Btw, if the Reg is introducing political articles, I take it you'll be looking to have proper balance? Something from the Trots (whatever they're called this week) would do as a counterweight to this one.

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The Adam Smith Institute?

I'll read this piece in consideration with all their other wonderful Thatcherite success stories - the poll tax, the deregulation of public transport, state schools running their own budgets and the internal market in the National Health Service, because they've all been so beneficial for the country.

And UKIP - the BNP for the chattering classes...

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UKIP?

What's Time Worstall's involvement with them?

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Anonymous Coward

UKIP?

You had me right up until UKIP.

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Anonymous Coward

Go to the Winston Smith blog to see where some of your money goes.

To know where your money goes, read Winston Smith's blog on local authority child care homes. It costs about £2500 per week per child.

http://winstonsmith33.blogspot.com/

Warning: Not for those with blood pressure problems.

My wife and I work to support our children; these just are handed everything as of right.

Cue "Bring back national service", "Bring back the workhouse" etc...

Warning: Not for those with blood pressure problems.

(Also

http://nightjack.wordpress.com/

http://nightjack.wordpress.com/2008/07/24/a-survival-guide-for-decent-folk/

http://nightjack.wordpress.com/2008/04/29/the-evil-poor/

)

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(Written by Reg staff)

Re: ASI and tax

Um, I think you'll find we've been running political articles for quite some time now.

Maybe we should start clearly marking such frivolities with NO IT ANGLE, like you put NO STEREO notices in your car to discourage thieves.

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Anonymous Coward

Election coming

Raises taxes on high earners.... sure they'll go elsewhere, but it will play well to the poor people. So a tax on a few to get the vote of the many. Where the tax doesn't come in till next year.

He did a hurried announcement on MPs expenses, pre-empting the committee looking into it.... again same thing. Getting the issue out of the way before an election.

I still reckon he's going to go for a mid year election, towards end of June or early July, he will only give 1 months notice, but you can see the rhetoric ramping up, and the fake websites and so on, in preparation.

It's doubtful he can afford to leave it till next year. He needs to have the election after the spending but before the tax bill comes in. Once the spending stops any 'growth' created will most likely fall away. He would not be likely to survive a leadership challenge when that happens. So this year rather than next.

The only way I can see him holding out till next year is if he's 100% sure of losing. Then everyone in Labour would want to milk the job for as much as they can get.

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Oh Dear

You seem to have published a political response to the budget! As a news outlet, does that mean you now have to allow the other parties to give their point of view? I'm pretty sure that if the BBC were to give political time to a member of one political party, they are bound to have to give other political parties their chance to respond in like?

I liked the article mind you.

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Half Good, but...

I agree whole heartedly that low income earners pay far too much tax, and that the majority of people pay more tax than the rich proportinatly.

Raising the allowance rate as suggested would help, not just those affected, but possibly the economy as a whole - all those people paying less tax would then have more money to spend on (essential) goods and services.

However, with out raising taxes elsewhere (e.g. on the rich), there would have to be cuts in public services (NHS, schools, etc.) which adversly effects the lower 50%+ , so much so that we'd be worse off overall. The rich have private healthcare, send their kids to private schools, don't use public transport, etc.

When tax is raised on the lower or normal income band, it's funny that we don't hear from economists and thinktanks saying that it won't work...

Other things that might help:

- Raising the minimum wage - at the moment it's a bloody insult. And it needs to be properly enforced, with stiff fines & prison sentances for employeers that break it. Companies that pay millions to their board can afford to pay more than a fiver an hour to their office cleaners.

- Reduce the basic cost of living. VAT is a grossly unfair tax, scrap tax on domestic fuel bills, and water bills are obcene in the UK. The big supermarkets need to be strongly dealt with - at the moment they're screwing both customers and producers (£1 in every 8 goes to Tesco FFS).

- Simplify the whole system. At the moment we have income tax with various bands, national insurance, VAT, council tax and on the other hand CT & housing benefit, working tax credits, child support, state pensions etc. I hate to think how much money is wasted on all the bureaucracy (and there's millions of pounds of support tht isn't being claimed by people that need it because the system is so complicated). Replace with an income guarantee & simplified income tax, for example.

My £0.02 :-)

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Heart

@ AC re:UKIP

Who cares? I don't agree with UKIP's silly populist nonsense, but that doesn't mean the article is worthless. Far from it.

Short, to the point, and very fair comment IMHO.

@ Secretgeek - lmao nice one!

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RE: Its good for me!!

It's ignorance like that which gets incompetent people voted in. If you stopped and thought about it for a second you would realise that if companies are being forced to go under and unemployment rises crime is likely to go up -- not a good thing. Also, shafting our economy means that anything bought from abroad will start to cost more as our currency becomes bogroll -- so anything you buy will cost more anyhow.

I could go on, but I think you get the idea...

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Tim
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This is just right wing ranting

Working in IT I know all about redundancy - having faced it on both sides of the pond. This is a volatile industry and people get laid off and companies collapse (I've experienced both).

What you get is pretty pitiful. Winging about the 'cost to business' is fine, but the reality is that what you get is a very small offset compared with the reality of losing your income, and trivial benefits (if you're single). Last time it happened, after I paid my mortgage I had £10/month to pay my bills and feed myself. It's tough and it's usually not your fault. In the land of the free, thats the cost. I had a one day notice contract. My employer did give me some redundancy (but only because they needed me to do an orderly shutdown of the operations they were closing). I'm sure business friendly policies like that are what the country needs more of.

The argument about basic rate tax is fine to a degree, although it's laughable to suggest the IFS is unbiased-

e.g. http://www.guardian.co.uk/commentisfree/2008/aug/19/tax.taxandspending?gusrc=rss&feed=politics

50% tax is not that high (it's less than I paid in California).

The problem with raising the personal limit is the kneejerk rightwing reaction to the counterpoint which would need to happen (i.e. raise income tax for those that pay). Otherwise you are giving more to those that don't need it (e.g. on £100K) while reducing your overall income. It's sensible and simpler - it might even be approved of by some on the intelligent right, but don't expect the Sun to announce anything less than Lenin's mausoleum is to be moved to Parliament square.

The truth is we can't have European levels of welfare on US taxes. Darling/Brown and Osborne/Cameron are both as bad as each other in trying to kid us on that front. The deficit is mostly down to not facing that reality, although at the moment cutting much government spending will mostly move people from low paid clerical work onto the dole where many will end up costing almost as much while not giving us any benefit in return.

IMHO.

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@ AC 11:31 "Election Coming"

"The only way I can see him holding out till next year is if he's 100% sure of losing. Then everyone in Labour would want to milk the job for as much as they can get."

Looks like it'll be next year then....!

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Fiscal drag cuts both ways

One only has to look at the infinitely postponed council tax revaluation on house prices to realise that.

I've been thinking linking the personal allowance to the minimum wage is a good idea for a while now, but I'd extend the principle across determining all of those arbitrary tax points by some property of the economy with a requirement that the statistics must be updated at least once per Parliament (and ideally every year seeing as they are collected anyway) eg have the higher rate start at the nth percentile of earnings, inheritance tax at the nth percentile of legacies.

Flat rate income tax is a daft idea though - it suffers from exactly the same fiscal drag problems as detailed in the article.

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Paris Hilton

UKIP advert

Not strictly to do with this article, but maybe you can answer a question about UKIP's advert hoarding up the road from me in Southampton.

It has a big picture of Winston Churchill, with the implication that he would support your policies.

Wasn't he a Liberal and Conservative? What right do you think you have to use a dead man's popular image to attempt to bolster your own campaign?

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Anonymous Coward

Rich or poor?

Why do I get the impression that this is written by someone who falls into the more than £150 000 pa bracket rather than the £60 pw one? Because it is the type of whinging about money you'd expect of a rich man rather than a poor one. "Bashing" the rich. My fucking arse!

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@pheet - minimum wage

It's not (just) whether or not your employer can afford to pay the minimum wage, but whether or not the employee brings minimum_wage of value to the employer.

If not, then the only reason to not fire them is because the employer can't afford the redundancy-pay hit all at once or because they're willing to risk the wrath of the law and keep someone in wages for what little value they do bring to the company.

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Stop

RE: Rich or poor?

Nah, it's written by someone domiciled in Portugal, one would assume for tax reasons if being cynical. Although I'm sure he'd disagree and blame the state of the UK.

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Paris Hilton

ASI and tax

I once met a girl from the ASI in Moscow. She was quite taxing.

Paris because of the hotel room tax.

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So much stupid, so little time...

"I worked out I will be about £325 a year BETTER OFF. I bet most of the people moaning about this budget haven't bothered to calculate how it really affects them, just jumped on the moaners' band-waggon."

This is exactly what's wrong with this country. People like you who are in it just for themselves. "Screw you Jack, I'm OK?" Well f*ck that. Some of us actually care about helping our fellow human beings. Isn't that the point of the Welfare State?

"If you vote, you should pay tax. Otherwise, non-taxpayers have no incentive to vote for tax-reducing parties (since it's someone else who'll be paying)."

Everyone in the UK pays tax. Ever hear of VAT? There are no "tax-reducing parties" anyway, all any of them can do is move the tax burden around. Some of us happen to think it's preferable that those who can afford it pay their share.

"To know where your money goes, read Winston Smith's blog on local authority child care homes. It costs about £2500 per week per child."

Right. Great. So you would rather children currently in care stayed with their parents and end up like Baby P? Well who gives a f*ck? It's fine as long as your taxes aren't paying for it.

If I was employing whoever writes that "Winston Smith" blog they'd be out of a job faster than you could say "uncaring psychopath". The way he talks about vulnerable people supposedly in his care is disgusting.

As far as the article is concerned, sure, in a fair society*, income tax should only kick in when you're earning well above minimum wage. It's about the only sensible suggestion I've ever heard from UKIP.

* You know what they say, you can't get there from here.

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Unhappy

It is worse then the government is telling people

It is much worse then people and the government can imagine IT wages have gone down, the cost of living in the UK is amongst the highest in G8 . 10 years of Labour government has created a overtaxed, overdependent society. The sad reality it will take many years to repair the damage that Labour has done to this great nation.

Lastly taxing the rich is a grand old socialist dogma sure it does sound fair but what about the ones that own business and factories. What happens if they say screw it is just to expensive to do business here I am going somewhere else.

This is just a terrible government !

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Bronze badge

Just one problem

Since the poor vastly outnumber the rich, if they were to stop taxing the poor, they would have to increase taxes on the rich to such an extent, they would all flee the country and take their capital with them.

I admit that there's also the middle class to tax. Raise the basic personal exemption to where you're proposing, though, to tax the middle class about the same as they are now, the marginal tax rate would have to go up quite high; and I assume it's not supposed to go down again when it reaches the rich.

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Anonymous Coward

@Magnus Ramming

So.... these super-rich being taxed at over 50%. Where's the incentive to keep their money in the UK?

We need to have a system where people get richer as they get richer. Otherwise there isn't an incentive to get richer- so things stagnate.

The main thing should be to not give people on unemployment benefits any money; they should just get whatever they need (up to the value of their benefits) supplied for them after loads of paperwork. It's a bit more complex logistically, but means that they can't get themselves into a comfortable long-term position; there'll always be an incentive to move on up. Plus it means they can't just drop into a drunken /drugged up stupour.

After that, the tax rates should be linked to the Average UK income; this would make it more inflation-proof.

Then we should get rid of the useless functions currently supported by the government. Vast swarthes of the job of governing the populace would be returned to people actually having to take responsibility for their actions. Parents should block porn on the 'net rather than the Government, Police should catch criminals rather than hugely lengthy inquiries that don't do anything.

All Governmental spending should be transparent (except Military and other national security concerns; a total should be available, but nothing deeper unless they want to declassify it). Details of non-military Government contracts should be available so that we can see when we're being shafted.

All ultra-database/ID/other moneysinks should be removed except where they should be shown to do some good.

And THEN we'd be in a position to sort ourselves out.

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Forget the workers

It's Friday and I haven't had my rant yet this week.

Too many people in this fread are on about "rewarding those who work" as if working is (in and of itself) a Good Thing. It isn't - if we could 100%computerise and robotise the entire planet's means of production then we could all lounge about and please ourselves all day with no downside. Might not be possible this week but let's not lose sight of this completely reasonable objective. Just sayin.

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Dead Vulture

This site is getting more like the Daily Mail everyday

No further comment.

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@Sam Liddicott

"It's not (just) whether or not your employer can afford to pay the minimum wage, but whether or not the employee brings minimum_wage of value to the employer."

1) It's people at the bottom of the company that produce the most value. The higher up you get, the higher the salary with less value being produced - e.g. middle management (who often decrease value), till you get to the boardroom which get paid millions but contribute very little worth often. Mr Goodwin for example.

2) Companies that pay shitty wages cost the rest of us money, as people on low income need housing benifit, tax credits, etc. to survive, which is paid out of our taxes (less all the burocratic waste). If people got decent, livable wages in the first place, we'd all be better off.

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Flame

Gah.

There's so much dumb on this page it's untrue.

(There's a lot of clever, too, but a lot of dumb)

Gems so far:

"the majority of people pay more tax than the rich proportinatly"

I never understand this: If you earn after tax £25k per year and someone else earns £50k, what's the issue? Mr £50k paid more tax than you (If he didn't, he's going to jail). You have plenty of money left. It's not like a loaf of bread is beyond your financial reach. Does it matter that someone else has more than you? Why should Mr £50k have half of his post tax earnings removed? To make you feel better?

"VAT is a grossly unfair tax"

Is it? It's a tax that reflects what you consume. The more you consume, the more you pay. It's a bit like the income tax that every left-leaning individual screams to be increased for those on obscene salaries*. Mr £50k contributes more to the economy, is rewarded more, and spends more. The government takes it's cut of the transaction. Of course, if you are saying that VAT adds to the tax burden and is unfair simply for that reason, I may agree, but taxes such as VAT do have a place in an economy, and they are by no means all bad.

"The big supermarkets need to be strongly dealt with - at the moment they're screwing both customers and producers (£1 in every 8 goes to Tesco FFS)."

Well, there's been a whole bunch of investigations into the pricing strategies of supermarkets, and I don't think they were found to be screwing everybody. And the fact that £1 in £8 goes to Tesco tells us nothing more than Tesco are very very good at what they do. Good to the tune of £3bn in a recession. Maybe they can run the government? At least they'll get the budget to balance in my lifetime.

Apols to those I've quoted directly- because some of what both posters said I agree with- the tax code is f*cking rubbish, and it's a nightmare to work out how much of your hard-earned is going to the government, but some of the comments here are FUD. Fair means rewarding those who work as well as making sure people don't starve to death because of an unlucky break.

Fair doesn't mean rewarding people who chose not to work to the tune of £35k a year in household income (Go google- a family of four who receive their entitlement in state benefits have an equivalent income to a family of four with one working parent on £35k p.a), and then taxing the hell out of people who earn less than that through honest toil.

*I never know what an obscene salary is- is one that's paid into an account at "Bank of Sh*tting Cocks"?

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